We understand the temptation for the federal government to focus primarily on the “retail” side of government — i.e. delivering public goods and services directly to citizens. After all, in a democracy a government’s customers are also its boss. Getting retail right is important.

But getting “wholesale” right — i.e. partnering with distributors, channels, and other intermediaries to provide services — is just as essential. It’s through wholesale platforms that citizens, businesses, and nonprofits can make more of federal resources than the government alone could.

Take, for example, how the federal government distributes funds. There are a number of high profile “retail” mechanisms to distribute benefits — such as the Social Security Administration sending checks directly to the disabled and elderly, or the IRS providing a refund check to taxpayers. The federal government also distributes “wholesale” block grants to intermediaries such as states, municipalities, and non-profit organizations, which in turn serve the public.

The retail vs. wholesale framework can be applied to the delivery of federal government services. The FBI serves as a retail police force directly investigating federal crimes, but also offers wholesale lab services to local police agencies that don’t have specialized capabilities.

The same framework also applies to digital services. Government websites, Twitter accounts, and emails are examples of retail digital services, where the government is directly reaching citizens through information and transactions. The federal government is making progress toward improving its retail websites — for example, see the Department of the Interior’s website, which explains government revenues from oil, gas and other resources extracted from federal lands.

To improve retail government websites, the White House launched the U.S. Digital Services Playbook, and the General Services Administration launched 18F, a consultancy that builds effective, user-centric digital services.

This is a commendable and important effort, but we’d also argue that wholesale digital services — opening up data and systems to business and non-profit intermediaries — is the massive opportunity that every government executive and public sector entrepreneur should be seizing to make government smarter and more effective. Wholesale digital services are what Tim O’Reilly calls “government as a platform.”

Just as some businesses like Apple have mastered both selling direct and through channels, some federal agencies have a long history with both retail and wholesale digital services. For example, at the National Weather Service,weather.gov is one of the most popular government websites, but the underlying weather data also powers your local news weathercast, weather apps, and a multitude of financial products.

Beyond open data, opening up systems, forms, and transactions to intermediaries is the natural evolution of a wholesale digital strategy for government. For example, since the IRS has already opened up its systems to vetted tax preparers, companies like TurboTax and H&R Block can compete to provide a great user experience and submit tax returns to the IRS on a user’s behalf.

How can wholesale digital services be scaled across government?Application programming interfaces (APIs) are how modern Internet software and apps talk to each other, allowing data to be shared across boundaries. Building and maintaining useful APIs is the key to a smarter and more efficient government, using low cost, existing infrastructure that already exists.

While we are huge fans of all types of government APIs as part of a wholesale digital strategy, we’d argue the largest yet untapped opportunity is public, read-write APIs — transactional APIs that submit data back to the government from external apps and services.

Here is an example of the wholesale opportunity at the Department of Education:

But what if the Department of Education employed a wholesale digital strategy as well?

Suppose the department builds a public, read-write API for the FAFSA. Vetted organizations could build applications that collect student and parent information and securely submit it to the Department of Education.

Imagine LA Unified School District, KIPP Schools, and after-school nonprofits all helping immigrant communities reach students that that are currently not applying for financial aid. The addition of a wholesale layer to the FAFSA lifecycle would allow institutions and companies who are already assisting students to step up and better serve the long tail of underserved student populations, similar to what TurboTax and H&R block does for the IRS. These existing organizations can extend the reach of the Department of Education, allowing it to better fulfill its mission.

From expanding higher education access to delivering benefits to veterans, providing the services that Americans need is no easy feat. But by adopting a wholesale digital strategy through open data and APIs, the federal government can more effectively partner with local government, nonprofits, and businesses to better serve the American people — extending its reach and helping solve our nation’s challenges.